Why Islanders may soon be paying more for beef

The president of Atlantic Beef Products in Albany, P.E.I., says Islanders will soon be noticing higher prices for beef at grocery stores. 

"We've had a couple of worldwide situations recently that have affected pricing internationally, not just at our plant, primarily caused by the outbreak of African swine fever in China," Russ Mallard said. 

Around a quarter of the world's pigs are expected to die from that fever as authorities grapple with the complex disease, which is spreading rapidly.

African swine fever is fatal to hogs, but is no threat to humans. As a result of a reduction in the pig population in China and around the world, demand for beef has increased.

Brian Higgins/CBC

Mallard said the current high demand for beef and pork products in the Chinese market has caused a ripple effect, driving prices up in Canada. 

He said beef from other countries typically destined for Canadian markets is now being diverted to China — putting more pressure on the Canadian market.

Lag in benefits to producers

And while consumers can expect to pay more for beef, Mallard said, local producers on P.E.I. likely won't be benefiting from the higher pricing right away. 

He said orders for beef products were locked down before the increase in demand had set in.  

"We have a short-term problem where the prices we quoted, you know, four or five weeks ago … are all quoted prices that don't reflect what's actually happened in the market today," he said.

Beef prices to farmers have actually not gone up the way you might expect. — Russ Mallard

Mallard also notes that the price for beef on P.E.I. is largely determined by what's happening in Ontario and the recent shutdown of a beef processing plant in that province has created a glut of cattle. 

"So that's meant that about 1,600 to 1,800 beef animals that were currently being processed in Ontario are no longer being processed at that plant because it's closed. So that actually has kind of been a tough situation for beef producers in Quebec and Ontario because they have one less place to ship their beef and there aren't that many places to begin with," Mallard said. 

"So when you lose one it does have an effect of backing up cattle. So although there should be an increase in the price of beef due to the demand, the truth is, the capacity to kill the beef has meant that beef prices to farmers have actually not gone up the way you might expect."

As a result, Mallard said, the company's planned expansion of the beef plant in Albany is more important now than ever. 

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